UAE deal bolsters Egypt’s foreign reserves in March

Egypt‘s net foreign reserves rose to $40.361bn in March from $35.311bn in February, the central bank said on Wednesday.

Additionally, Egypt‘s deficit in net foreign assets (NFAs) shrank by EGP217.1bn ($7.04bn) in February, according to central bank data, after a $5bn payment from the sale of development rights to prime Mediterranean land.

UAE-Egypt deal

Egypt received the initial $5bn payment from the UAE in its $24bn deal at Ras El Hekma peninsula west of Alexandria, Prime Minister Mosfafa Madbouly announced on February 29.

The February deficit dropped to EGP679bn. The figure did not yet reflect an $8bn expanded financial support programme with the International Monetary Fund signed on March 6.

Commercial bank foreign assets surged in February by EGP911.3bn month-on-month, while their liabilities dipped by EGP15.73bn, according to the data.

Central bank foreign liabilities decreased by EGP81.6bn.

NFAs represent both central bank and commercial bank assets held by non-residents, minus their liabilities.

The central bank had been drawing on the country’s NFAs to help support Egypt‘s currency over the past two and a half years. In September 2021, NFAs stood at a positive 248 billion pounds.

Egypt devalued its currency to under 50 pounds to the dollar as part of the March 6 IMF agreement after having left it fixed at 30.85 to the dollar for a year. Since then it has strengthened to 47.10 pounds to the dollar.

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